SOUTHEAST MICHIGAN INSURANCE HIRING TRENDS

With continued low levels of unemployment and a lack of people entering the insurance industry, the local market continues to be employee driven.  As a result of these factors, we are seeing changes in compensation, hiring criteria, and flexible schedule options. The ability of insurance agencies to adapt their practices and customize employment situations to attract great employees is now front and center.  The agencies who are succeeding are implementing some of the trends discussed below. 

Compensation

Salaries are climbing again in the independent agency and broker arena, but it is an uneven trend.  Currently, we are seeing more increases on the P&C side overall.  There is also an uptick in job offers including hiring bonuses. Typically, these are offered as an attempt to compensate for anticipated bonuses or to help pay for COBRA when the new employer has a waiting period for health insurance benefits to commence. 

The actual salaries are a moving target.  In commercial lines and employee benefits when the positions involve very large/complex accounts, self-funding experience, or marketing/client facing skills, we are seeing salaries and incentive packages that are in the $80s and up.  Personal lines account managers with expertise in high net worth accounts are also seeing salaries beyond the average range.

Compensation by position – Average 
Position 2019 
Commercial AM $60-75k+
Commercial CSR/Tech $45-55k+
Personal AM $40-60k+
Emp. Benefits AM $60-80k+
Emp. Benefits Analyst $50-80k+ 

It is interesting to note that salary has become more dependent upon qualities other than technical insurance skill.  Soft skills are sometimes being valued more than depth of insurance experience.  Also, we are seeing compensation levels rise for Gen X and Gen Y employees, as insurance agencies realize the pending retirements within their current staff.  The compensation packages for these employees is sometimes not commensurate with their immediate contribution value to the organization.  It is driven by competition in hiring the next and smaller generation of insurance professionals. Below are averages for positions within a mid-size independent agency.  There will be exceptions on both the higher and lower sides due to work environment, flexibility, overall benefits, and hours expected from the employer.  Yes, there is such a thing as battle pay!

Soft Skills

There are many soft skills to hire for within the insurance industry.  Technical insurance knowledge can be taught, but soft skills are difficult to teach.  The insurance industry remains a people business, and the ability to interact successfully with both internal and external customers is important in most positions.  Employers want employees who are pleasant and have a positive attitude. These are base soft skills.  The employee who performs above the base level in this area brings additional strengths to the agency.  Some areas that we see as becoming even more important are:

  1. Creative problem solving – employees who identify issues and offer ideas on how they can be solved.  Technology and the pace of work/life are changing rapidly.  Being able and willing to identify ways to adapt to changes, increase efficiency, or create work arounds in areas benefiting the organization are highly prized.  This includes identifying opportunities that might have been overlooked through a different paradigm.  Multi-generational workplaces create a great environment for people with this soft skill to thrive.
  • Bridge builders – this may be one of the most overlooked contributions.  Employees can be experts in their own specific area, but not engage in dialog and interaction with other departments outside of what they need to accomplish their tasks.  The individual who can build trust and goodwill with other departments can sometimes uncover ways to enhance the overall organization.  Being willing to ask why and invest time in developing relationships is a soft skill that has diminished with less personal interaction in daily life.  Collaboration enhances ideas and promotes bonding among co-workers.
  • Verbal and written communication – grammar and spelling issues reflect on your organization.  Employees who can convey information clearly and concisely have an advantage.  Written communication with clients should be free of grammar and spelling errors.  It should be easy to understand and to the point.  Telephone conversations should be friendly and professional.  Employees who have the skill of active listening are better able to identify and meet expectations by both the employer and the clients.

Flexibility

Job candidates often express the wish for greater flexibility.  This alone can be the sole motivator for a job change.  Flexibility encompasses a lot of different arrangements, some of which are easier to accommodate than others.

  1. Flex scheduling options – offering staggered schedules has become more popular lately.  We are seeing options such as 7am-3:30pm, 8am-4:30pm, 9am-5:30pm.  Some employers will also allow a reduced lunch hour in order to accommodate leaving earlier in the afternoon. This is viable for many employers when they have enough people to cover their core hours of operation.  We are also seeing a trend of less than a 40-hour work week.  Typically, it is now 37.5 hours.
  • Working remotely – the ability to work remotely is sometimes a strong motivator for employees that live a good distance from the office and would be willing to commute, but not every day.  While there are employers that hire totally remote workers, this is still an exception.  More often we see one or two days per week, and sometimes the ability to increase that with tenure and performance. Employers seem to prefer a balance with inside office work because it allows for collaboration and ease of communication.
  • Reduced work week – offering extended daily hours and a four-day work week.  Some employers have offered this option to promote flexibility. When co-workers cover for each other, this has the added benefit of extending availability to clients outside of the agency’s core hours.
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When you’re looking for a good insurance hire in an employee’s market, you need to understand the forces at work.

 

I recently read an article about the current real estate market and it seems a great analogy for what we are seeing in today’s insurance hiring marketplace. Everyone has heard of home seekers losing out to more competitive bids or terms.  As frustrating as that can be, the first step toward success is understanding and accepting the market you are dealing with.

Just like the real estate market often fluctuates, so too does the insurance employment market.  Make no mistake that we are in an employee market currently.  Insurance employers in an employee market can make great hires, but they need to be smart about their interviewing and recruiting efforts.  Here are some mistakes that we see as specialty insurance recruiters. 

Not making your best offer upfront

Trying to obtain the house we want for as little money as possible is our default position.  This is true for many things in life!  In the current market multiple offers are common, and many are at or above list price.  This is not the time or the market to low ball an employment offer. An employment offer of a salary lower than asking is not a reasonable strategy in the current market. Sometimes there will be negotiation, but if there is a better offer on the table you may not get that opportunity. It is important to understand the market and the prevailing salary ranges before making an insurance employment offer.

Not being open to different solutions

Perhaps a you have a firm idea of the ideal house, in the ideal location, and at or below what you are prepared to spend.  In this market a homebuyer needs to keep an open mind so they can work with what is available. In an employee’s market, you may be waiting a very long time to find someone who fits exactly the criteria you desire.  It is better to identify the problem or workload that you need to resolve within your insurance organization.  Is it possible that it could be managed by two part-time employees?  How about a full-time employee that needs to work remotely 1-2 days per week?  An employee that needs a flexible schedule due to traffic or daycare needs?  Lastly, you may need to consider candidates with less experience than you desire.  An eager learner may bring more enthusiasm into your organization and help build your bench for the future.  

Not making the candidate feel valued during the interview process

Okay, this one doesn’t really follow the analogy, but it is so extremely important that it cannot be stressed enough.  Timely communication and feedback are crucial.  Long delays between interviews, lag time after an assessment has been taken, excessive processes and interviews, failure to keep the candidate informed of the process along the way – all these things impact the feeling that the candidate is developing toward your organization.  Candidates have options right now.  The option to stay, or the option to interview with multiple organizations.  They simply are not going to make a move if they don’t feel confident about the organization or how they will fit in and be able to contribute.  Counter offers are very common and can be quite aggressive right now.  If the candidate has doubts, their resolve to leave will waiver.   A seamless interview and hiring process along with great communication will provide the extra reassurance a great insurance employee may need to make a change.

Not working with an experienced agent

An experienced realtor (or recruiter) will know what the market will bear.  If you have a seasoned recruiter on your side, you’ll be in a much better place to get your offer accepted.  They understand the emotions that are churned up by both parties, they know salary and benefit levels for their segment intimately, and they will prevent you from making an offer that will not be accepted.   They know which items are most important to each party, and they can help facilitate a match that benefits both.  Motivation, counter offers, needs for accommodation – those are all concerns that recruiters deal with regularly.  Rely on this experience and you will not be sorry that you did.

Not learning from your mistakes

Just like house hunting, you might have to go through a few disappointments with unaccepted offers.  It is not fun learning that your job offer has been declined, and it’s easy to get frustrated if you are having multiple offers declined.  It is important to solicit candidate feedback on your interview process and offers.  Is there something you can tweak to make things smoother?  Is your idea of salary levels off base?  How is your organization perceived in the local insurance arena?  If you have had the good fortune of historically low turnover, these can be difficult questions to ask but they are important if you want to attract and retain great insurance talent in this market.

 

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The Importance of Social Capital in the Workplace

 

The insurance industry has taken great strides toward identifying human capital through various profiles and tests.  We have also done a good job focusing on developing talent, providing leadership training, and creating workplaces that offer more flexibility and employee focused benefits.  All of this is important; but an often overlooked aspect that affects retention, engagement, and performance is social capital. 

Employees who are connected to their colleagues are more likely to work toward common goals, less likely to act in an opportunistic manner, have a greater degree of trust, and often produce better results.  Some of the soft skills that make an employee socially successful are difficult to identify with traditional tests and profiles.  The ability to relate on a level that encourages collaboration and fosters trust is one of the more important skills in the workplace.  This is how great ideas are shared and developed, and it is a skill set that insurance millennials embrace.  They want to be connected to their colleagues and they want to feel part of an organization that has a common goal.  Investing in HR activities focused on building relationships among your employees may be more important now than ever before.   

We have had insurance employees express dissatisfaction with pay and other variables in the workplace, but ultimately decide to stay with their employer because they consider their coworkers their friends and extended family.  Opportunities for your insurance employees to build and maintain social relationships are of prime importance for the next generation.  Specific examples include team outings to sporting events, movie nights, and meals out together.  Just food for thought!

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Independent Insurance Agency Workplace Trends

In 2016 we fielded a lot of questions from employers regarding PTO, flex scheduling, and work hours in general.  As the talent pool shrinks, more employers are rethinking their traditional HR practices in order to attract the employees that they would like to hire.  It is clear that things are changing somewhat, with more employers offering different flex options with earlier or later start times.  A couple of agencies have offered a flex schedule option of a 4 day work week with extended hours.  We are seeing these options more often in order to accommodate daycare or school scheduling, as well as traffic patterns for those employees with a longer commute.  Sometimes an accommodation in this area can be effective with recruiting new employees. 

We do see options of working from home on a limited basis.  As a side note, we have seen employers in outlying areas set up for completely remote employees with varying levels of success depending upon the investment in IT , and identifying the employees that are self-disciplined and able to work autonomously.

With regard to PTO and work hours, we analyzed data on 31 independent agencies in south east Michigan.   The large majority of Michigan independent insurance agencies are using PTO time instead of separate vacation and sick days.  The average starting PTO for a new employee was approximately 15 days for the first full year.  After that time, the increases were seen primarily at 5-9 years with days increasing to an average of 19.  There were also increases at 10 years +, with varying schedules and “maximum” days.  Experienced employees who have built up to higher PTO are reluctant to lose that time when switching employers, so we do see some flexibility from employers in order to make a job offer that is accepted.

The average work day was approximately 8.5 hours, with 1 hour for a lunch period – so most of agencies have a 37.5 hour work week if the lunch period is deducted.  We have noted that there are a few agencies that have decided to reduce their hours by shortening the lunch period.  This seems to be something that most employees favor. 

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Building a Bench for the Insurance Industry!

Recognizing early on the looming staffing crisis for independent insurance agencies, The Michigan Association of Insurance Agent’s established the MI Future Foundation. For the past 15+ years, MI Future has been working to bring prospective employees and independent insurance agencies together, through a focus on public relations and education.

MI Future is doing a great job of attracting young talent to our industry. We recently attended the Insuring MI Future Summit, and were impressed with the progress that has been made by this group. 

Through no small effort, they have managed to coordinate a program where students in area high schools can earn credit toward graduation for insurance related courses.  These courses also qualify for college credit within the state of Michigan.  Currently, there are active high school programs in Genesee and Ingham Counties that provide excellent models for duplication. The curriculum for this program has been approved by the state, allowing it to be offered in any county in the state.

Even this small amount of insurance knowledge makes these young people desirable as new hires for independent insurance agencies.  Please spread the word if you have any connections within the educational community.  We have many young people graduating college with general degrees, big debt, and no suitable employment.  A high school providing this program will give students a leg up on a real job upon graduation, even before completing their degree.  The insurance industry continues to provide a stable, lucrative, and diverse array of career opportunities. 

Please spread the word if you have any connections within the educational community.  This is a great opportunity for young people in every area of the state. 

More information can be found at www.insuringmifuture.org

 

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